The reason is driven by both quantity and price. Under the background of the rebound of pig price in the third quarter, the current pig sales volume of muyuan shares also increased significantly. Thanks to the companys extremely high business concentration, muyuan shares almost monopolized half of the net profit of the listed pig breeding companies.
More importantly, although the pig price in some regions has fallen below 30 yuan / kg, the supply side of the industry in the fourth quarter is not equipped with conditions for substantial improvement, which will support the pig price and the profitability of muyuan shares.
On October 20, the results from the wind sellers consistent profit forecast showed that although the annual profit outlook of muyuan shares was slightly lower than that of 34 billion yuan in mid July this year, it was still close to 32 billion yuan.
Monopolize nearly half of the profits of the industry
As of October 20, according to the lower limit of performance forecast net profit, the total net profit of 16 pig breeding listed companies that have made performance disclosure in the first three quarters of this year was 46.87 billion yuan, while that of muyuan stock reached 20.99 billion yuan, accounting for 44.8%.
Compared with other top pig enterprises, the profit of muyuan shares has also drawn a significant gap. Based on the lower limit of net profit forecast, the net profit of Wenshi shares in the first three quarters was 8.1 billion yuan, Zhengbang technology was 5.417 billion yuan, and new hope was 4.8 billion yuan
The reason is that none of the above-mentioned companies are as concentrated as muyuan shares. Wens shares are developing pigs and chickens at the same time. Zhengbang technology is engaged in feed and breeding business in half. New hopes business is more complex, including feed, poultry, pig and food
In contrast, muyuan shares, 97% of the income of listed companies comes from pig breeding.
When the industry prosperity is at a high level, the performance elasticity of muyuan shares is the strongest. On the contrary, when the price of live pigs declines, the performance withdrawal range of muyuan shares will be greater.
First of all, the price of pigs this year basically presents stable in the first quarter, down in the second quarter, and rebound in the third quarter.. According to the monthly sales data of muyuan shares, the average selling price of pigs of the company in the third quarter was nearly 34 yuan / kg, which was nearly 18% higher than that in the second quarter.
What is the concept of 34 yuan / kg?
The calculation results of Founder Securities show that the cost of pigs in the third quarter is about 13.69 yuan / kg, and the average profit per head is 2624 yuan.
The second is sales volume. At the beginning of the year, each company gave the annual marketing plan and focused on the second half of the year, but the general sales situation was not ideal.
In contrast, the annual sales target of muyuan shares is 17.5 million to 20 million, and the peak sales volume of the company in the first half of the year is 1.523 million in June.
After entering the third quarter, the companys sales volume increased steadily, and the sales volume from July to September was 1816000, 1634000 and 1650000, all higher than the peak level in June.
If only from the perspective of operational efficiency, the secondary market will call it Maotai in pigs, it is not too much.
At present, the consensus of the market is that as long as the pig is maintained at about 30 yuan / kg, pig breeding industry is the most profitable industry, and muyuan shares is the listed pig enterprise with the highest profit scale. This is evidenced by the performance of the first three quarters.
High prosperity of pig breeding
On October 20, the seller consistent profit calculation results from wind showed that the annual net profit of muyuan shares was expected to be 31.894 billion yuan.
Although the expected value is lower than that of 34.073 billion yuan in mid July this year, after conversion, the net profit of muyuan shares in the fourth quarter of this year is still expected to reach nearly 11 billion yuan, which is still a small increase compared with the third quarter.
From the current industry evolution trend, the above expected value is more reliable.
At present, the market is in a state of continuous price reduction. The price of pig fluctuates between 29.5 yuan and 30.5 yuan per kilogram, but the price will rise slightly due to the demand before the holidays Baichuan information pig industry analyst Jiang Yue said on October 20.
Jiang Yue pointed out that although the downward trend of pig prices has been established, pig prices have also dropped significantly after the national day. However, considering the large-scale situation of the supply side in the fourth quarter, the possibility of a sharp decline in live pigs is very small, which is just a slow downward adjustment of several days of decline and one day of rise.
In her opinion, the centralized marketing nodes on the supply side may be postponed to March and April next year, when pig prices will be raised by spring festival consumption, some pig enterprises may increase their marketing efforts by borrowing high prices.
In addition, as far as the performance of muyuan shares is concerned, even if the average selling price of pigs in the fourth quarter of this year is lower than that in the third quarter, the improvement from the sales level will have a certain hedging effect.
According to statistics, in the first three quarters of this year, the pig sales of muyuan shares were 2.564 million, 4.217 million and 5.1 million respectively, with a total of 11.881 million pigs sold.
The company is expected to reach 18.59 million pigs in the fourth quarter, up to 18.59 million pigs in the fourth quarter, which is still expected to reach the target of 18.59 million pigs in the fourth quarter.
Industry insiders believe that even if pig prices fall significantly in the fourth quarter, muyuan shares can completely adjust the listing to make up for the negative impact of the decline in pig prices on the companys profits.
Although the annual profit prospect of muyuan shares is bright, it is difficult to further improve the companys valuation when its profit scale is equivalent to that of a national joint-stock bank.
Based on the above expected annual profit of 31.894 billion yuan, the annual EPS of muyuan shares is 8.51 yuan / share, and the latest valuation level is only 8.8 times.
The stock price valuation of muyuan stock is obviously low, which is mainly affected by the change of secondary market expectation.
At the beginning of 2019, in the early stage of pig price rise, the stock price of muyuan shares will be about 18 yuan, and the highest will be 99.01 yuan in July 2020. During this period, the whole pig price is in the upward channel, and the profit expectation of the secondary market for muyuan shares is rising.
Now, with the recovery of domestic pig production capacity, including breeding enterprises, the expectation of pig price decline in next year has been strengthened, and the premium of profit promotion given by A-share market will disappear.
Since July this year, the stock price of muyuan shares has fallen to about 75 yuan, during which the total market value of muyuan shares has shrunk by more than 80 billion yuan.
However, under the background that the industry boom began to enter a downward cycle, the space for Qin Yinglin to further improve his personal wealth has become smaller and smaller.
At that time, all the company can do is to try to be low-cost through scale. If we want to restore this years ultra-high profit margin, we have to wait for the coming of the next round of pig cycle.
Source: Yang Bin, editor in charge of economic report in the 21st century_ NF4368